How agricultural and environmental interests meet together in the future CAP

5th Forum for Agriculture

Brussels, 27 March 2012

Ladies and Gentlemen,

Dear friends,

It is a pleasure to be here today at the 5th Forum for Agriculture. Not only because this meeting marks the arrival of spring in Brussels, after a long and dreary winter – but because this Forum recognises the importance of the coming together of agricultural and environmental interests.

This is very important, not only for the environment but also for our health, well-being and prosperity. Because the truth is that there will be no productive agriculture in the future, if environmental and agricultural interests do not meet. And today I would like to illustrate how these two have mutually supporting long-term interests.

This sessions' theme ("reconciling productive agriculture with the environment: closing the loop") is very timely. The proposal for the future CAP has introduced some very important green elements in the 1st pillar as well as strengthened the environmental angle in the 2nd pillar. On-going discussions in the Council and the European Parliament, however, reflect the reluctance that still persists in the minds of many. "Greening the CAP" is in the interest of all of us. Postponing it will only lead to higher costs in the future – not only in economic terms but also costs in relation to our health and well-being.

We need to acknowledge the interdependencies between all key policies affecting our natural capital, and we need to remove barriers to improving sustainability and using the available resources more efficiently, while at the same time providing a fair and predictable basis for business to operate.

We will have to face up to the reality of resource scarcity in the future and adapt our policies, legislation, production and consumption methods to avoid becoming victims of our own success and - instead - transform this new reality into an opportunity.

Resource efficiency will probably be a dominant theme for the rest of our lives, whether we like it or not … we don't actually have a choice. We know that we will most likely share our planet with 9 billion people by 2050. Even more significantly, it is predicted that there will already be 3 billion extra middle class consumers by 2030, which will also put immense strain on many resources. And that pressure will be themost significant limiting factor on our ability to grow and provide higher living standards.

The scale and effects of increases in consumption will be hundreds of times greater than what we know from the early days of industrialization.

Estimations show that we will need three times more resources – 140 billion tons annually1 – by 2050. The demand for food, feed and fibre is projected to increase by 70%. Yet already today 60% of our ecosystems underpinning these resources are degraded. And without efficiency gains, by 2030, we will need 40% more water than we can access.

The situation of the increasing pressure on water, land, soil, biomass, minerals, metals and fossil fuels in our finite world is therefore a matter of great concern. We need to rethink the way we use the planet's resources, and how sustainable agricultural production will play a role in this.

Reconciling agriculture and the environment is possible and is very much needed, not just for agriculture, not just for the environment, but for the survival of all of us, human race and the species we share this planet with. And finding the right equation between water, biodiversity and food production will be crucial for it!

Just few days ago, we celebrated World Water Day. It is no coincidence that water is more and more at the centre of our attention. In terms of resources, water availability is seen as one of the key constraints for increasing agricultural production in the future. While at EU level, the largest proportion of water is still used for energy generation (44%) and mainly returned to water bodies, water abstraction from agriculture not only represents the second largest with a 25% share, but agriculture uses the largest volume of water which is not returned, and mainly used for irrigation….

…In the context of climate change and increasing water scarcity, the agricultural sector is seen as a key player in enhancing the sustainability of water use in Europe.

Reduced water availability has a critical impact on mainly every aspect of our life. Citizens' health and good environmental status depend on the quality and availability of fresh water. However, this is decreasing. Many European river basins and waters have been altered by water abstraction, land drainage and dams, leading often to poor water quality with major adverse ecological effects, possible health impacts and leaving limited space for natural habitats.

But when it comes to water, it is not only quantity that matters. The analysis of the river basin management plans, under the Water Framework Directive, suggests that nitrate and phosphate pollution affects more than 90% of our European river basins. And a major part of the nutrients' oversupply comes from the agricultural sector.

An improved approach for a sustainable management of water resources is possible. Changes in the ecosystems, land use, in production and water consumption and re-use patterns could cost-effectively reduce scarcity and ensure water quality.

In terms of resource efficiency and how we should play it rightly for the environment and agriculture, phosphorous is a good example. It is an essential nutrient for plants, animals and humans – without phosphorous life would not exist. There is no substitute for phosphorous and there will never be. It is a finite resource, and nearly all of what is mined as phosphate rock, goes into the key use of fertiliser and animal feed. Demand for mineral fertilizer will rise with world population and increased needs for food production in the predictable future.

And while we know that phosphorus is a relatively abundant resource, its supply is associated with particular difficulties related to contamination and geographic availability. In Europe, virtually all our inorganic phosphorus is imported. However, when inefficiently managed, surplus phosphorus getting into water is associated with severe pollution and eutrophication. At the same time, with wasteful use of phosphorous we waste the significant quantities of water, energy ad land that are used to manufacture it.

Theoretically, phosphorous is almost fully recyclable especially when soils have reached near saturation; in reality, our urban and rural development make that difficult. But there is room for improvement. It is clear that there are many technologies and societal adjustments that could significantly improve the resource efficiency of this and other finite natural resources. Many of them are relatively low cost and would simply need some political impetus to be taken up.

Coming back to the sustainable agriculture equation and why biodiversity is part of it:

Let me start from the negative side of the problem. Biodiversity loss has economic costs that are only now starting to be fully appreciated. It is costly for society as a whole, and particularly for economic actors in sectors that depend directly on ecosystem services. It also limits the delivery of ecosystem services essential to maintain a healthy population, including the provisioning of food and drinking water. Many ecosystems experienced considerable decline since 1990, especially agro-ecosystems, grasslands and wetlands. Large expanses were lost due to land conversion and abandonment.

But instead of observing slow decline in biodiversity, we should have all the interest to maintain and restore it. Biodiversity has an indispensible role in providing ecosystem functions and the services that they deliver. These services are - or better to say: were - sometimes taken for granted. Such is the case of insect pollination, of which the estimated economic value is 15 billion euro per year. Or take the example of green infrastructure such as flood or erosion prevention as part of biodiversity-related ecosystem services. Or further on, soil biodiversity and its role in keeping the water and nutrient cycles running and sustaining agricultural productivity in the long run. Finally, we should not forget the central role that biodiversity has for genetic diversity and by that, providing a resource for improved livestock and crop varieties in the future, helping improve resource efficiency of agriculture (like for example water, energy, pesticides and nutrients use).

On top of water and biodiversity as two key elements for food production, another two complementary factors should be added in view to increase agriculture productivity and its output in a sustainable manner: improved knowledge base and its successful transfer into practice; and reducing of food waste.

On the former, quite some should have been already discussed earlier today. Investments in research and development have proven to give a high return rate in other sectors, and agriculture is not an exception. There is still quite some room for improvement also in disseminating the existing knowledge into production practice and developing new innovative methods and technologies.

On food waste, I am sure you will hear more in the years to come, food waste beyond the farm is of such proportions that we have to address it. The accepted figure is that globally, 30% of food is wasted once it leaves the farm. To considerably reduce this loss is a great challenge for us all. It is within this framework that the Commission will develop a Sustainable Food Communication for 2013, bringing together into one coherent policy framework the many aspects of food production and consumption, from biodiversity loss, to health as well as food security and food prices.

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Ladies and Gentlemen,

Agriculture is not just the production of food, and it is challenged not just by the environment, but also by offers of shortcuts to higher production even when such higher production is not sustainable. I believe that a true partnership between agriculture and the environment is possible and that it is possible to reconcile productive agriculture with sustainable and efficient use of natural resources. My and the Commission's answer to this lies in our attempt to green the CAP, and for this, we proposed the three greening measures that are now on the table and respond to the very challenges of water, biodiversity, land use, soil protection and reduced pollution burden. These greening measures - protection of permanent pasture, crop diversification and ecological focus areas - are designed with the idea of sustainable agriculture and environmental protection at their very heart.

If, for instance, we don't have a reasonable approach to crop diversification and rotation, it is clear that plant diseases will increasingly affect our crops, potentially reducing yields, lead to higher pesticide use, greater costs for farmers, much greater clean-up costs for water and reduced biodiversity.

And not only that. We will lose soil organic matter - the biological engine of our productivity - which in some areas is already seriously declining.

I don't believe that this is what farmers want, nor do I believe that they are not prepared to provide a safe haven for birds and butterflies, for bees and beetles all of which, as part of the ecosystem, deliver invaluable environmental goods to farmers themselves, and to society.

Nor do I believe that we can conveniently ask agri-environment measures to reverse alone negative trends in the agri-environment relationship.

Together with cross compliance, agri-environment has been our major contributor to a better relationship, but it needs the help of greening. And for all that we know today about threats to water as a finite resource, we should not question the use of the Water Framework Directive in the cross compliance.

The greening of the CAP represents a further coming together of environmental and agricultural interests. Rejecting it would undermine public recognition and acceptance of agriculture's role in society, and expose productive agriculture as one of the main causes of the continuing environmental decline. And we all know how important agriculture is for our lives!

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Ladies and Gentlemen,

We are not starting from scratch, we have good and solid basis we can build onto and we have already taken some important steps. But, we need to do more. We have a dynamic instrument in the CAP and we need to make full use of it to deliver a better future for agriculture and the environment.

Today it is no longer a matter of questioning whether productive agriculture and the environment can walk hand in hand. It is about aligning existing policies, closing the loop and placing the environment at the heart of agricultural policy. And to thank farmers, also by financially rewarding them for helping us deliver a public good which is healthy and sustainable environment.

In the end, we should not forget that all the challenges that I have mentioned lie ahead of us also in the global context. In the Rio20+ summit next June, the EU will be looking for progress on green growth as a mean to bring together economic growth, natural capital and the well-being of society. To achieve results, we want to focus on five 'pillars of life', which are:

sustainable energy;

water, in particular its efficient use;

sustainable land management and ecosystems: this means also stopping land degradation to support sustainable agriculture and help preserve the ecosystem services, on which the poorest people in the world depend for their living. Stopping land degradation is essential for food security!

ocean resources : finding sustainable ways to use them for food and survival;

more resource-efficient and zero waste economy: here, for example, reducing the food waste will be an essential step for improving food security.

Altogether action on these five pillars can help alleviate poverty and deliver food security, and can help alleviate the pressures that we will cause for this planet in future, as I explained in the beginning.

This oblige us to work seriously reconciling environment and agriculture in Europe, since if we do not do our homework well, we can hardly expect that our efforts for promoting sustainable future will be matched by action around the world.